Each week, we geek out over the juicy data and market insights from John Ellis and the Automotive Advisor team. Here’s the latest:
Navigating Current Market Conditions:
⛽️ Pain at the Pump — Gas prices have been on a steady rise throughout the Summer, but are finally beginning to ease. The national average for unleaded gas is $3.83/gallon as of August 24, down 1.2% WOW and down 1% YOY.
🏡 Housing Market Hurdles — The housing market remains very sensitive to mortgage rates, which have been volatile this year but have surged to new 22-year highs in recent weeks. The existing home market continues to be constrained by supply and will be as long as rates remain high.
💪 Job Stability — Initial jobless claims remain steady, indicating a healthy labor market.
🎭 Mixed Sentiment — Overall consumer sentiment dipped 3.1% in August due to those rising gas and interest rates. However, the consumer’s view of vehicle buying conditions was mostly unchanged from July and at the best level since February.
New Car Market:
🚗 Strong Sales — July saw a surge, with an annual sales pace near 15.9M, up 2.6M from last year. Sales volume increased by 15.3% YOY, reaching 1.32M units.
🚙 SUVs on the Rise — Mid-sized and compact SUVs are gaining market share by 0.2%. Meanwhile, trucks and SUV/Crossovers saw a slight decline of 0.1%.
Used Car Market:
🔍 Market Surprise — Used-vehicle sales continue to surprise, increasing by 2.1% in July. Retail sales are also trending up.
📉 Pricing Dip — Used-vehicle pricing declined 4% YOY primarily due to declines in wholesale values earlier this year.
Wholesale Prices:
🚗 Car Segments — Car values decreased by 1.73%, with compact and mid-size cars leading the fall.
🚚 Truck / SUV Segments —Trucks and SUVs dip by 1.43% staying consistent with previous weeks.
What's on the horizon for 2024?
🏦 Steady Growth — With the wild swings of the COVID era fading, growth in 2024 will likely resemble pre-pandemic stability. Federal Reserve Chairman Jerome Powell has expressed cautious optimism but maintains a readiness to act if needed. Analysts predict the Fed will trim rates to around 4% next year.
🌟 Retail Optimism — Rates and inflation are moving in the right direction and the outlook remains positive. Dealers are gaining market share, and data indicates the first half of 2024 will offer a thriving economic landscape.
💼 Labor Lament — Despite this rosy outlook, the labor market continues to face concerns due to the aging workforce, which means the job market is about to get real competitive, y’all.